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Sao Paulo to sue Siemens over price-rigging claims

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(Globalpost/GlobalPost)

Sao Paulo state said Tuesday it planned to sue German engineering giant Siemens over allegations of price-rigging during bidding for the city's metro rail systems.

"We are taking legal action against Siemens," State Governor Geraldo Alckmin told a press conference.

"If it is proven that other companies also were involved, all will face legal action," he added.

Last week, prosecutors said they had launched a criminal investigation after uncovering "strong indications" of price-rigging during bidding for Sao Paulo's metro.

"Based on documents from CADE (the Brazilian antitrust authority), there are strong indications of criminal cartel formation in bids called by the Sao Paulo commuter rail company CPTM and the Sao Paulo Metro company from 1999 to 2009," said state prosecutor Marcelo Mendroni.

Alckmin said Siemens was targeted because it twice refused to provide state officials with information about the case.

He added that state authorities got access to the CADE documents.

Prosecutors have not named the firms targeted but press reports have named them as Siemens, Spain's CAF, Japan's Mitsui, Bombardier of Canada and France's Alstom.

According to local media reports, Siemens recently reached a deal with federal authorities in Brazil to avoid criminal proceedings, and voluntarily gave details of the price-fixing cartel.

The alleged price-fixing occurred under the rule of the Brazilian Social Democratic Party (PSDB) in Sao Paulo state.

Alckmin's PSDB, who is in opposition to President Dilma Rousseff's ruling Workers Party nationally, has denied any wrong-doing.

Monday, Transport Minister Cesar Borges announced a one-year delay in the start of bidding for a $16 billion high-speed train service that will link Rio with Sao Paulo and Campinas.

And he conceded that the project may not get off the ground.

The auction had been expected to take place on September 19.

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http://www.globalpost.com/dispatch/news/afp/130813/sao-paulo-sue-siemens-over-price-rigging-claims